Natural Person Debt Relief Reforms in Nigeria: A Comparison with South Africa

Abstract

The purpose of this article is to compare the proposed natural person debt relief procedures in Nigeria with South Africa’s existing and proposed measures. It is the first time that the proposed Nigerian system is analysed. The comparison is made in order to determine whether Nigeria can learn from South Africa’s experience regarding natural person insolvency law. South Africa is chosen as a comparative jurisdiction because it has a wealth of documented experience relating to insolvency law. Furthermore, Nigeria and South Africa boast the two largest economies on the African continent and consequently share economic and developmental challenges. These challenges are intrinsically linked to natural person insolvency law, since they determine the context in which an insolvency law system must be developed and within which it must function. As a subtext, the research considers whether Nigeria complies with some of the more pertinent international principles and guidelines regarding natural person debt relief. To achieve this objective, the Nigerian system is measured against the yardstick of the World Bank Report on the Treatment of the Insolvency of Natural Persons. Two key foundations of effective and efficient natural person insolvency systems highlighted by the World Bank’s report relate to (a) access to insolvency systems and (b) the eventual discharge of debts that such systems should result in. The research concludes that the Nigerian natural person insolvency law reforms do not meet the required international standards in these respects and that the jurisdiction may learn from South Africa’s successes and failures within the field, particularly from the circumstances leading up to and its recent proposals for reform.